semi detached

Acquiring US rival Navistar could give VW an edge in global trucking race

main 0200425480 AP – truck desert VW MAN Scania Daimler Mercedes-Benz IPO listing spinning off seperation German semi rig makers Volkswagen
The road to an IPO can be bumpy. Source: AP

The man who has worked at Daimler for a quarter of a century, Andreas Renschler, is now readying Volkswagen’s truck and bus business for the stock market. Formerly a truck executive at the world’s biggest truck maker Daimler, he needs to turn VW’s three semi brands into one business that operates around the world. “A global presence is important to cope with regional volatility,” Mr. Renschler told journalists in Munich.

The 60-year old joined VW in February 2015 to foster cooperation between the carmaker’s three brands — Scania, MAN and VW’s Brazilian unit Caminhões e Ônibus — and catch up with Daimler. Daimler sells its Mercedes-Benz, Freightliner, Bharat Benz and Fuso semis worldwide, whereas VW’s brands sell mainly in Europe and Latin America.

Listing the truckmaker should provide the cash to fund these global ambitions. One option includes buying full control of US peer Navistar after VW had acquired a 16.9 percent stake in March last year. “(Taking over Navistar) would make sense at some point,” Matthias Gruendler, the finance chief of VW truck and bus, told reporters in Munich. The collaboration with Navistar, which includes joint procurement and development, gave VW new access to the US truck market.

VW has announced it will cooperate with Japanese truck maker Hino, a subsidiary of Toyota.

VW could list its truck and bus business as early as next year, although Mr. Rentschler knows an economic downturn could still scupper his plans. Daimler will be watching closely; it is also looking carefully at a possible flotation of its rig division. The carmakers’ rivalry is taking on a new dimension as they fight over customers, investors and strategic alliances.

If Mr. Renschler succeeds in guiding VW’s truck division to independence, thatwill mark a crucial development in the global truck economy. Twelve years ago, German manufacturer MAN attempted a takeover of Swedish rival Scania, only to see Scania, part-owned by VW, swallow them up in a hostile counter-bid. VW has been cooperating with MAN, which originally stood for Machine factory Augsburg Nuremberg, since 1977, and bought stakes in the two companies during the past decade.

A week ago, VW decided to change the legal structure of VW Truck & Bus to a joint stock corporation, from a private limited company. That’s a prerequisite to listing the business. A stock sale of 20-25 percent of the division could raise up to €7 billion, industry sources said.

Last week, VW also announced plans to cooperate with Japanese truck maker Hino, a subsidiary of Toyota, VW’s bitter rival in the passenger car business.

Once Daimler and VW’s truck businesses are listed, the race is truly on. It could even spur more deals in the industry.

17 p18 VW – The largest truck manufacturers-01

Markus Fasse specializes in aviation and automobile industry news and works from Handelsblatt’s Munich office. To contact the author: fasse@handelsblatt.com

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